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Nintendo's recent fiscal report revealed shockingly poor sales for the Wii U console, and while the company did turn a profit, it once again failed to hit estimates. On top of that, the company decided to hand over the North American reins to Satoru Iwata, giving him the additional responsibility of Nintendo of America CEO. What does it all mean for Nintendo, and can Wii U bounce back? GamesIndustry International chatted with several leading analysts to get their takes.

"Nintendo of America's performance the past couple years has been a disaster on almost every level. Much of this was due to lack of execution on basic stuff like product marketing," said David Cole of DFC Intelligence. "They forgot Marketing 101 for the Wii U and no product could have done well without basic marketing support. Clearly a change in execution was long overdue. The damage done is enormous but there is the possibility of a turnaround. The fact is that the general public is not really aware the Wii U even exists so it is an opportunity to almost start from scratch."

Indeed, Nintendo need only look to its 3DS strategy as an example of how the company could potentially fix the Wii U, said Asif A. Khan, CFO of Virtue LLC.

"I still believe Wii U will outsell past flops like the Gamecube, and Nintendo's brands will retain their value for decades to come"

Asif A. Khan

"I believe that 3DS offers a perfect template for how Wii U could succeed in the future," he said. "Nintendo had an equally poor 3DS launch lineup as we have seen with the Wii U. One thing that holds true for most systems they have made, software moves the hardware. Nintendoland was not as compelling and groundbreaking as Wii Sports was in 2006. The wow factor of the Wii U is very hard to advertise on television and with no robust third-party exclusives, the system's launch can definitely be characterized as a flop. This does not mean that the company is going to die."

"Nintendo is projecting a huge 674 percent increase in net income year-over-year and the bar is incredibly low going forward with the last two years being some of the worst financial performances in the company's history. What has given life to the 3DS in recent months is the introduction of high quality first party titles and I believe we will see the same process play out for the Wii U," Khan continued.

"Nintendo's biggest problem right now is balancing quality with quantity of games. It takes time to make high quality games, and they clearly don't want to overspend on this console cycle. This painstakingly slow approach to software development is why the company is still standing today after past weak console cycles. I still believe Wii U will outsell past flops like the Gamecube, and Nintendo's brands will retain their value for decades to come."

EEDAR's Jesse Divnich shares Khan's optimism for Nintendo. "Nintendo expects to sell an additional 9 million Wii U units this fiscal year, which is a positive sign for the hardware. While the past quarter numbers have raised eyebrows, Nintendo's confidence in next year does indicate they likely have a few promotional/marketing programs in the pipeline, along with the strong likelihood of stellar content we've yet to see," he said.
"We know Nintendo has been in this position before with the 3DS and they were ultimately able to regain consumer confidence and wallet share. We've yet to see the best Nintendo has to offer for the Wii U. I am reserving long-term judgment on the Wii U until we see stronger first party content released. If a new Super Mario, Smash Brothers, Pikmin or Zelda game are unable to revitalize sales, then I'd begin to be concerned."

Clearly, action is needed to turn things around, and with Iwata now helming Nintendo of America as well, it may be easier to push out a more unified global strategy.

"Nintendo's historically central role in gaming could be permanently diminished if it doesn't execute better in the US in the next 12 months"

Lewis Ward

"The shift in structure likely speaks to a desire to bring Nintendo's Japanese and American operations closer, consolidate its strategic efforts and maximize the opportunities available to the company on a global level," said Scott Steinberg, CEO of consulting firm TechSavvy Global. "With one foot in America and one in Japan, Iwata's leadership may be able to better bridge the gap between audiences and markets, and ensure that the company continues to innovate and deliver high-quality content that appeals to all. The key to rebounding is focus, differentiation, and ability to communicate value - hopefully, Iwata will be uniquely poised and able to draw on the best of both worlds to achieve this goal."

IDC Research Manager Lewis Ward added, "I think Mr. Iwata understands that for Nintendo to grow overall in 2013 and 2014 that business has to bounce back in the US in particular. It's been here where the drop in Wii sales was sharpest in recent years and where iPhones and iPads and so forth have put serious pressure on the 3DS. I read this change in role as a signal that Nintendo's board will keep an exceptionally close eye on US trends in the coming quarters, and will do everything possible to boost Wii U and 3DS performance in the US."

"Nintendo will get a little leaner and meaner in 2013. The salad days of the Wii and DS family are gone and it could very well be that Nintendo's historically central role in gaming could be permanently diminished if it doesn't execute better in the US in the next 12 months."

Even if Nintendo does execute better in the next 12 months, it's going to be facing an incredibly competitive market as new consoles from Microsoft and Sony will likely be on store shelves, noted Billy Pidgeon, an independent analyst who previously worked at Inside Network, M2 Research and IDC. Pidgeon believes "Nintendo's FY 2014 forecasts for Wii U and 3DS are very aggressive relative to sector potential" and he also cautions that "ninth generation will be selling in more slowly across all vendors in comparison with the eighth generation as the console business has changed fundamentally."

It's hard to judge currently what sales volume ninth generation consoles will achieve, but it's ultimately important to keep in mind that Nintendo doesn't need to dominate any "console wars" to be successful. The company has a track record of being profitable, and if you're an investor, that's immensely appealing.

"I got quite a laugh this morning when I read the headline that Nintendo missed their profit expectations. The real headline to me is that Nintendo has returned to profitability," remarked Khan. "Considering many folks in the industry claim that this company is on a colossal death spiral, a weakening yen and new compelling software may prove bears wrong yet again. When the stock market prices a company for death and they don't die, there is usually a lot of upside to being a contrarian."

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36 Comments

Marketing is one thing, and Nintendo has its issues with TV ads being banned for misleading information in the UK as well as being formulaic and feature driven. Really Nintendo your going to do a TV advert that lists 1-4 your top features? In the US the TV ads for the flagship launch title, Nintendo Land were absolutely forgettable. Hey lets get a bunch of families and put them in different colored boxes playing the game (oh and make sure we have each ethnic group properly represented). Compare this to the brilliant TV campaign for the original Wii.

But in their marketing teams defense, without a breakout blockbuster piece of software even the most clever ad would have failed. Layer on top of this the complicated message that the GamePad presents and you have a recipe for disaster.

Problem is that it is only going to get tougher for Nintendo with both Sony and Microsoft about to fire off their massive campaigns.

Imagine if Nintendo cozzied up to Apple and brought their IP to iOS! Now that would be an unstoppable combination.

Couldn't agree more about the comparisons between the Wii U marketing and the original Wii. The "Wii Would Like to Play" campaign was quirky, simple and direct and really nailed the mainstream audience Nintendo was targeting. There is a problem, as you say, with lack of things to talk about; the cupboard's been pretty bare after the system's launch. We'll have to wait and see how they do over the holidays.

Some good, no nonsense common sense analysis there. Great read up GI. It's been a disasterous start for Wii U, but it's not a death blow for the company. It'll be genuinely interesting to see what kind of impact Iwata has on NoA. Part of me suspects it's a fall back plan to keep Iwata heavily involved in Nintendo operations--he has effectively signaled he will step down if Nintendo don't hit their profit targets next year, so perhaps if worst comes to worst, he'll step down as global President but remain as CEO of Nintendo of America?

Imagine if Nintendo cozzied up to Apple and brought their IP to iOS! Now that would be an unstoppable combination

I'm suprised at how your argument escalated in that very last sentence, those are the sort of conclusions that an assumptionist would make. Such a combination would destroy Nintendo, an iphone is extremely weak in comparison to a handheld console lacking massively in both graphics and space, it very much suprises me as to why people think a smartphone could possibly compete with handheld. People would no longer have a reason to buy a Nintendo system and hardware sales would fall below hot water. Do you really imagine people playing a dumbed down-scaled version of zelda with the lack of buttons and barely any lasting appeal?

"The fact is that the general public is not really aware the Wii U even exists"

I'm still wondering how Nintendo muffed that one up so much. Perhaps this has to do with the fact that they have very little compelling software at this point to make more than a small amount of people want to go out and buy the system but even less people are going to be interested in buying a system they don't know exist. I have seen very few ads for the Wii U.

Instead of just copying Microsoft's 360 controller for their Wii U pro controller design they should have also copied Microsoft's marketing strategy for the Kinect . There were literally ads for that product everywhere, which made everyone aware of it and also lead to record breaking sales. I'm not saying Nintendo needs to spend as much as they did but they need to do alot more marketing than the little bit they have done so far.

"Nintendo's biggest problem right now is balancing quality with quantity of games."
Hasn't it been their biggest problem since...oh, I dunno...the Wii?
Shovelware has been rampant and half-assed remakes of the same old IPs have dominated their software for almost a decade.
The ONLY IP that they haven't completely screwed is Zelda, and even that they've been exploiting.
Instead of trying to appeal to EVERYONE, which is also a major marketing no-no, appeal to your core audience that has made you the real money since the beginning.
If they want to start making money, give everyone a GC controller back and just start making high-quality games.
Gimmick is temporary, and that's what has been driving them under this whole time.
I'm sad to say that I've been telling everyone this since 2006 about them.
Nintendo has sold out to the casual gamers and let greed take over.
It's no longer about making good games, but making a quick buck, regardless of what that really means.

You do know iOS runs on not only the phone but iPad, iPad Mini and iPod Touch. Combine lifetime sales of those pieces of hardware are, phone - 320 million, pad - 121 million, pod - 82 million

As to the power, I would challenge your statement that an iphone is "extremely weak". Especially when you compare a iPhone 5 to the 3DS. Same processor (1Ghz dual core), Bigger screen, retina display, 1 gig ram vs 128 mg.

So you are right that no one would have a reason to buy hardware from Nintendo anymore. But is that a bad thing? Forbes reported that in 2008 Nintendo made a $6 operating profit per Wii unit sold. So lets be generous and say they maintained this the entire life-cycle (which they didn't because of price declines) that is only $600 million profit over seven years. This from the console that was considered a massive success. It is widely accepted that with the Wii U they would need to sell many more millions of units to break even from R&D, production costs and marketing.

Supercell makes over a million dollars a day on a IP no one had ever heard of and on a title that took less than $1 million to develop on iOS.

So when you ask me do I really imagine people playing Zelda, Mario, Animal Crossing or any of the other stellar Nintendo IP on these devices my answer would be, yes, hundreds of millions of them!

I remember about 2 years ago, when NOA closed their marketing offices and moved to Redmond (I think thats right). In the process, several of there leading marketing figures left the company and were replaced by new hires (or less experienced people).

I always wondered what the impact of this would be ... and I guess we now know.

The positives for Nintendo are that the WiiU is a fantastic device, and there are fantastic games coming. Get some good marketing people in, and lets see some sales rolling in. As for doing something simple like the original Wii ads "Wii would like to play" - great idea!

"So when you ask me do I really imagine people playing Zelda, Mario, Animal Crossing or any of the other stellar Nintendo IP on these devices my answer would be, yes, hundreds of millions of them!"

@Steve Fowler

Be that as it may, these games would be a shell of what they were on DS/3DS without buttons. Sure they could probably make some quirky spinoff game that costs 99c, but if you're not really getting a true Zelda/Mario experience what's the point?

Now you're arguing a matter of opinion. When you have a brilliant mind like a Miyamoto, who has proven to be able to innovate on unique user input, whose to say that he wouldn't make a Mario touch version as deep as any other iteration? We are very early in iOS life-cycle as a gaming platform, lets see what brilliant game designers can do with it as it becomes a legitimate revenue opportunity. Clearly Bungie co-founder Alex Seropian and others like him are betting big on deeper game experiences on the platform.

Don't kid yourself with the 99c thing. That is not the business model that will succeed for deeper game experiences. IAP and MTX are the way to make money and I would expect Nintendo IP would lend themselves to that business model quite well.

The ONLY IP that they haven't completely screwed is Zelda, and even that they've been exploiting.
Instead of trying to appeal to EVERYONE, which is also a major marketing no-no, appeal to your core audience that has made you the real money since the beginning.
If they want to start making money, give everyone a GC controller back and just start making high-quality games.

I find it strange that you mention Zelda as "The only IP Nintendo haven't screwed" considering that Twilight Princess and Skyward Sword were seen as weaker entries into the series while Super Mario Galaxy 1 and 2 are in the running for greatest Mario games ever made.

In addition, other IPs like Fire Emblem and Donkey Kong Country had triumphant returns.

And appealing toe everyone is not a marketing no-no. Mass Marketing is another strategy in a marketer's toolbox just like niche marketing.

But of course, let's give everyone back a Gamecube. The worst selling Nintendo console of all time. That will bring back the big bucks.

Nintendo didn't sell out to the Casual gamer, they were pushed into the casual gamers arms by hardcore gamers demanding "Mature" games...whatever that means.

Edited 1 times. Last edit by Mohammed Alsadoon on 26th April 2013 1:52am

Marketing had little to do with it. Nintendo's problem is that they were releasing a console that was barely competitive with Sony and Microsoft's five year old consoles, a year before each of them came out with something better, and they charged at least 30% too much for what it was. They released with no significant exclusives and plenty of ports of games that people already owned for their other console.

If Nintendo were actually serious here, then either A: they would have upped the stats significantly so that the console would be competitive with the assumed PS4 specs (and waited to release if necessary). or B: they would have released at a cost barely more than the Wii, a "casual purchase" price to make their chintzy little console ubiquitous. And in either case, C: They should have had at least one killer app, a next gen Zelda, a revolutionary Mario maybe, a Mario Kart, something totally nuts, nothing they've released or even announced comes close.

I agree with Steve Fowler that Nintendo would do well to bring their IP to other platforms. The trick is in how you do it; don't try to bring 3DS or Wii titles to iOS or Android. The important part is getting Nintendo's iconic brands to the huge mobile audience. Simple Mario, Zelda and Donkey Kong games (perhaps based on old N64 or SNES titles) that used the touch interface well would introduce a whole new generation to Nintendo characters. Then, when you've got them loving Animal Crossing or Zelda, cross-sell them into buying the 3DS or Wii U versions.

Nintendo could even make some serious money with the right free-to-play designs based on some IP like Pokemon or Animal Crossing.

This would, however, require a complete mindset change at the Nintendo executive level, which I deem unlikely at best.

To be honest, there are several issues being discussed here in the comments and in the main article:

1) Marketing: The WiiU did not have strong marketing. Worse than that, it did not have a strong marketing push - the difference being that they assumed the public were "aware" of the Nintendo portfolio and so relaxed on the push that the Wii had. It has been shown time and time again that product performance is proportional to the amount spent on marketing (average to good marketing - bad marketing doesn't show such a correlation and the old adage that "all press is good press" doesn't literally apply, despite what some people think! :) )

2) Games: Nintendo are aware of their primary problem when it comes to their hardware products: mainly that their in-house IP is much, much stronger than third party IP. Why is that? Is it their problem? My personal opinion is that, no, it is not. They shouldn't be worrying about Activision's or EA's IP, they should be worrying about their own. It was a mistake to launch the WiiU without proper IP support in the ridiculous hope that third parties would put not only their best IP behind the product but that they would support it out of the gate on the strength of the previous hardware iteration. Yeah... that worked out really well for the N64, didn't it?#
As far as I'm concerned, I think the WiiU will be fine but it will be N64 levels of fine after they release first party IPs to strengthen the hardware value.

3) Nintendo IP dilution: Nintendo IP is strong for two reasons: The Nintendo Seal of Quality and exclusivity.
Let me place an analogy on the table here: Dyson vacuum cleaners are demonstratably better than most other consumer-grade vacuum cleaners but they are not qualitatively better than other vacuum cleaners: if you have a floor/carpet to be cleaned, virtually any vacuum cleaner will do. What Dyson has is a brand and a well-marketed and differentiated brand. This is exactly what Nintendo has in both their IP and their hardware designs. If you begin to dilute the IP by having it on other hardware, yes - initially it would sell more units - but then it wouldn't be unique and it wouldn't associate with hardware sales any more. Both of those diluting factors result in reduced income and reduced brand value.

In summary: Nintendo would be stupid to purposely dilute their brand(s) by putting them on other platforms (to the benefits of those competing platforms) if they have other options and financial stability.

4) Competitive edge: It has been shown time and time again over multiple generations of console and PC hardware (let alone in the physical goods world!) that console performance is not an indicator that the mass market (or even the hardcore market) responds to. (I'm looking at you Tim Ogul). PS1 was top dog but had less power. PS2 was top dog but had less power. Wii was top dog but less power. The NES, SNES and Megadrive weren't the most powerful consoles of their respective generations but they still outperformed the competition.
Power and output of pixels and vertexes and resolution of textures is a completely irrelevant aspect of gaming. Yes, prettier games sell better and are easier to market but gameplay is king. No games looked as good as Dragon's Lair for many years after its release but is that genre still applicable today? Did it win over FPS, RTS, TBS and adventure games? No, it didn't.

5) Market strategy: I hope that Nintendo know what they're doing by consolidating their NA and JPN operations. Different markets require different strategies (as I'm sure they are aware)... it's the reason why NOA exists in the first place. You can't have a strong product and try and release it in different markets without market knowledge... it just doesn't work! If anything, the article worries me because it's stating that Nintendo Japan are executing the same mistake that many other japanese companies have made (and american, going into other territories) and that is the same mentality, psychology and logistics don't work in different countries. Capcom learned this recently... and then forgot. Square Enix did too but then failed to capitalise on the opportunity by being unrealistic in their expectations. Microsoft, with regards to the Xbox and 360, has been a huge failure in this regard too. If anything, the biggest success - despite all their missteps - is SONY.... who have managed to keep pace with the 360 from the PS3.

6) Miyamoto is past it: I've watched the industry for many years and, I acknowledge that Miyamoto is as great a luminary as Garriot, Spector and Molyneux are but he (and no comment on the other three!) has been treading water for the last decade - for whatever reason. He sees the visions afforded to us via new technology and interfaces - I can't discount that - but his game design chops appear to be declining as everything he's had his hand in over that decade has been average at best. You look at most titles that bear his name and you see that it is his successors who bear the chalice and either he hasn't the ability as a manager/producer to guide them or they don't have the ability or freedom as designers to realise those visions fully.

7) Interface and design trumps power: Smartphones may be more powerful than the handheld dedicated consoles but they only have two inputs that are realistically used on the majority of games: touch and motion. The dedicated handhelds can have a better wealth of interaction due to the buttons, motion, multiple touch or visual interfaces than a smartphone can ever hope to have.... not to mention not having part of the CPU and GPU on task to hold all the other OS and operations in current memory. As much as a dedicated console can outperform a higher specced general purpose PC, so too can a handheld console outperform a smartphone.

8) Competition: Nintendo is in a very strong position right now because their production process has been implemented over the last few years: cost savings can be applied and the technology is cheaper. Microsoft and SONY have a huge uphill battle on their hands for expensive consoles in the current and near-future economic market/climate. I know it's not a cliché to mention that but it still applies... People do not, generally, have spare cash flow to spend on a $300-$500 piece of equipment and the associated games (and in the case of MS a subscription) that are required to make it work.

I guess, in total summary, Nintendo will be fine, will everyone please stop panicking? :D

It seems like Nintendo is constantly falling victim to go fever. Go fever is "the overall attitude of being in a rush or hurry to get a project or task done while overlooking potential problems or mistakes."

This definitely seemed to be the case with the Wii U. A system custom built for an underserved segment of the market ended up launching with a handful of titles targeted at an over served segment of the market. Probably because in the rush to get the project out the door, people felt pressure not to raise warning flags or their warnings were marginalized and ignored.

@James Prendergast, what you say about performance is true, to a point. The Wii U doesn't have to be the most powerful system in the next generation to be successful. The problem is that it isn't even quite the most powerful system of the LAST generation. It's better at some things, worse in others, overall not great. When compared to the PS4 and the likely equivalent Xbox 3, it's a toy. Now, the performance numbers alone will not sell many units, but the differences in observable graphics and experienced gameplay capabilities will. If you can make a crazy awesome game on the PS4/Xbox, but have to chop it off at the knees just to get it to run on the Wii U, a customer who's looking for the best games certainly won't be buying a Wii U.

The PS1 could underperform very slightly to the Saturn and still do great. If it was underperforming to the Sega CD then I doubt it would have been about to capture the market.

Also, Wii had a few things going for it that Wii U didn't. For one, it had a very unique mechanic for a while, the motion controller. Now the Wii U has the second screen. But now both it's competitors do too. Sony has their Vita connect, which is the most robust version of this technology, but also by far the most expensive. Microsoft has smartglass, which is the weakest version of this tech, but largely free to most people who can afford a next-gen Xbox, and capable of doing a lot of the things people like about the feature.

The Wii was successful as a console mainly on the junk games market, the little goofball motion games. Can Wii U fil that role? Maybe, but not at the current prices, and really it's biggest competitor in that market is the Wiis people already own.

I know it's not a cliché to mention that but it still applies... People do not, generally, have spare cash flow to spend on a $300-$500 piece of equipment and the associated games (and in the case of MS a subscription) that are required to make it work.

Yes, but assuming that a consumer doesn't already have a Wii U (which is a fairly safe assumption), then why would they spend $300 to get a Wii U, knowing that it's already obsolete, instead of spending $300-400 on a next gen console that will likely be relevant for years to come? If you're only going to be buying one console within the next three years or so, then the Wii U would only be a reasonable choice for people who are 100% invested in Mario and Zelda as the defining feature of their gaming choices.

If anyone does own both a Wii U and a PS4/Xbox3 this time next year, then pretty much every game that they purchase will be for those consoles, except for the Mario/Zelda games, because anything third party will play much better on the other hardware. This means that third party developers will have limited reason to develop for the console, knowing that their work will sell much better on the other, more compatible systems, and it also means that the software sales figures coming in to Nintendo will be very soft whenever a brand new Mario or Zelda isn't out there.

As to the power, I would challenge your statement that an iphone is "extremely weak". Especially when you compare a iPhone 5 to the 3DS. Same processor (1Ghz dual core), Bigger screen, retina display, 1 gig ram vs 128 mg

What on earth are you talking about? Do you not know how much it would cost to have an iphone 5 with 1 gig of ram? A regular Iphone 5 only has 16GB of space, and that costs £500 just for the whole phone, compared to 3ds's cheap price of £150, and the 3ds supports loads of 8GB sd cards which can be ordered off amazon for only a fiver, 1GB of RAM has 100GB and that would be extremely expensive for an iphone.

Until Apple adds sd cards to their phones, I will continue to listen to music on my 3ds and vita.

Those who say iphone 5 has better graphics than the 3ds are joking, there is barely a hardcore libary for the iOS and the ones that are such as minecraft and Resident Evil 4 have DS level graphics. Even though every new iphone becomes visually better it's only a slight improvement and smartphone developers barely make use of it. Until Apple releases a controller add on for their iphone and bring cartridges in, Nintendo and Sony are fine. I reckon that if Nintendo and Sony added mobile phone features to their next handhelds the smartphone market would be at stake because people would be playing and calling on far more powerful devices which are phones and handhelds at the same time.

As for Nintendo's partnership with Apple; it will never happen, I can't think of any company who would be more paranoid about their games ending up on someone else's machines.

As for handhelds, it's a tricky situation. True handheld consoles like the Vita and 3DS have better performance than current gen phones (for now). Fact. True handhelds have much better control schemes for a broader variety of games. Fact. True Handhelds are cheaper than smartphones. Fact.

But that doesn't really matter. Yes, they're cheaper, but plenty of people already own smartphones, and the proportion will keep growing. They don't have to decide to drop $150-250 to buy a gaming device, they already own one. It's like how Microsoft's Smartglass is theoretically the most expensive "second screen" option out there, and yet in practical terms it's the cheapest.

And yes, current gen consoles are more powerful for gaming than smart phones, but not for long. Given a year or two there will be phones with much better gaming specs than current gen handhelds, and next gen handhelds will be several years off, but which point the phones of that generation will likely be impossible to top for a reasonable price.

And yes, I hate playing most traditional types of games using a smart phone screen, "faux-analogs" are inevitably bullshit, but there's no reason they can't make a reliable and competitive dockable controller rig for android phones, especially if Samsung is part of the process. I think maybe they're already working on it. It certainly wouldn't be a worse option than the circle-pad pro.

At the end of the day though, it's not Apple that Nintendo needs to worry about, it's Samsung. Nintendo and Sony might be able to make some money off of this generation, but they've got about three years, five on the outside, before it'll be impossible for the dedicated console to survive. Hell, they've only got about ten or fifteen years before living room consoles won't be able to compete with smartphones.

The power of the WiiU has nothing to do with this - except for perception. The WiiiU is *easily* more powerful than either a PS3 or 360 (I have the dev specs here) - but Nintendo isn't interested in pushing this angle. They are interested in pushing superior games - but unfortunately for them, they didn't have an appropriate title ready for launch.

This to me is the killer point - if Nintendo would have launched with a SINGLE first-party, hardcore, killer title (Eternal Darkness, Metroid, or something the CoD/Halo/GoW/Skyrim crowd would be really attuned too) then things would be different. Gamers could SEE that the WiiU is more than a competitive console, and is capable of pushing out games that the PS3/360 didn't.

Rather, they launched with a HD Mario and Nintendoland. Both are great games, but they only try to push minor "gameplay" innovations over the other consoles (look, I have a touch screen.. whoopie!).

Two years ago they should have picked some AAA developers, and spent $100m throwing them money to make an exclusive game for launch, just for the WiiU, that Nintendo could publish.

But they didn't. As a result, the only people buying a WiiU are the Nintendo hardcore/early-adopters.

Its only going to take one GREAT (and it needs to be GREAT) game to turn this around ... and we are still waiting.

Another thing: Nintendo have not properly leveraged the "Wii" part of the "WiiU". A different angle for launch would be one following the exact pattern that the Wii did - release a "WiiSports II U/HD" title. Add more games, make them playable via Wiimotes, add "spectator" support for the WiiU controller (someone can be an umpire!), add full network support, and redo all the games to properly use the power of the WiiU. Similar ads, similar marketing, play with friends remotely, full video chat, etc.

It may not have fit their "reclaim the hardcore" concept, but we have all seen how well that worked out.

The WiiiU is *easily* more powerful than either a PS3 or 360 (I have the dev specs here) - but Nintendo isn't interested in pushing this angle.

I don't know, there was a lot of word coming out from third parties that ported their games over at and after launch about how it's better at doing some things and worse at others. Like it could render certain things prettier, but couldn't handle as many individual AI units at once as the Xbox in some games so they had to scale some stuff back. It's possible it can do anything the older systems could do if fully optimized, but who cares to bother? The point is, even if it is unarguably better than the current gen, it's not by much at all, if Sony were making it it'd be the PS3.1, while the next get is supposedly a noteworthy leap. If you're upgrading from Wii to Wii U you might notice a difference, but there's not enough there to draw people with any concern for their money over from an Xbox or PS3, and for a new gamer, you can get one of the current gen systems for $50-200 cheaper than a Wii U, half that if you get them used.

If you're buying a console in the spring of 2013, Xbox or PS3 is your best bet, because they work about as well as the Wii U, are considerably cheaper, and have a ton more games. If you're capable of waiting six more months, the PS4 or perhaps XboxNext will be your best option, because it will crush the Wii U in terms of performance, and the PS4 at least is already better supported by developers than the Wii U is.

It's not that there's no reason to get a Wii U, there just aren't any compelling reasons. If $300 is "why not?" money to you, it's a reasonable purchase. If it's "why?" money to you, there's no good answer, and there are a lot more people in the latter group.

Two years ago they should have picked some AAA developers, and spent $100m throwing them money to make an exclusive game for launch, just for the WiiU, that Nintendo could publish.

Lego City Undercover?

I still think it's too late for even a "great" game to "turn it around." The market has spoken on the Wii U, and third party developers seem to have abandoned the whole idea of it. They might come out with a ground breaking Zelda in a year or two, and they might sell some units for $200 or less to play it on, but I highly doubt that it will cause enough of a shift that third parties will start the engines back up. They are in PSP-position.

Now, now - thats very close to trolling ;). The tech difference between the Wii and the WiiU is astounding, which is one of the reasons why all the Nintendo core will have no issue upgrading the WiiU when their game hits.

You make some good points comparing it to current-gen consoles - but I'm thinking its going to be the same (if not worse!) when the PS4 & next XBOX hit. There was nothing at the Sony PS4 reveal (to me anyway) that screamed *look at me, I'm next-gen*. In fact, I think a lot of consumers will struggle to see a noticable difference between the current-gen and next-gen consoles.

When you factor in pricing, and the price of games - not to mention "always-on" or anything else imposed on gamers - we might find BOTH Sony and MS have a hard time convincing anything other than the "core" to upgrade. Just like the WiiU, its going to take some astounding games to do it.

I think its going to be years before we really know whats going to happen - the 360 is a great gaming device, and really - its good enough for almost the entire gaming population.

a reliable and competitive dockable controller rig for android phones, especially if Samsung is part of the process

I can completely agree with what you said about Samsung, they're far more of a threat than apple and they have been experimenting a lot with Nintendo and Sony's handheld concepts. Even though phones are becoming more powerful, I think that the most likely thing that will happen is that the handheld and smartphone industries will combine into one rather than destroying eachother.

As for phones destorying home consoles, I think that's a long way off; perhaps 20-30 years into the future. It's one thing to just combine the elements of a phone and handheld gaming indsutries together, but convincing hardcore gamers to drop their blocks of hardware for a smaller device is an entirely new level. Cloud Gaming or whatever they call it will only steal the casual family market of gaming. Games such as Halo and Skyrim require bulky hardware with loads of circuits and fans to be able to run, at the moment it's impossible to compress all those circuits into one small device and even if electricians and circuit designers could it would have severe overheating problems.

It's safe to say that for a few more decades people will still be using hardware boxes. I will never be convinced to only have one device until they have become as tech savvy as linux.

Hardcore PvP fans and mainstream AAA fans are not one and the same. They represent different demographic segments of the core audience, radically different player types and players who are motivated to play for almost polar opposite reasons. So what appeals to the hardcore COD / Halo / Gears of War crowd will in all likelihood have little to no appeal to the vast majority of the mainstream crowd.

This is why I don't quite understand why people believe 3rd party AAA hardcore support for the Wii U would make any difference? I'm not criticizing your opinion, I'd just like to better understand the rationale behind it. The AAA market has been struggling for years because the vast majority of 360 and PS 3 games now only reach a single digit percentage of the installed base. So if the vast majority of core players are rejecting the types of games AAA developers and publishers release on the 360 and PS 3, why would AAA developers and publishers experience more success with the same types of games on the Wii U? Especially since the Wii U was (in theory) built to target players who are under served, or not served by the 360 and PS 3? Which part of the equation do I have wrong or don't understand?

A lot of things do not make real sense until I got to the end of the article.

"It's hard to judge currently what sales volume ninth generation consoles will achieve, but it's ultimately important to keep in mind that Nintendo doesn't need to dominate any "console wars" to be successful. The company has a track record of being profitable, and if you're an investor, that's immensely appealing."

""I got quite a laugh this morning when I read the headline that Nintendo missed their profit expectations. The real headline to me is that Nintendo has returned to profitability," remarked Khan. "Considering many folks in the industry claim that this company is on a colossal death spiral, a weakening yen and new compelling software may prove bears wrong yet again. When the stock market prices a company for death and they don't die, there is usually a lot of upside to being a contrarian."

If this was SONY or Microsoft, their systems would have tanked real hard without any signs of getting back. Nintendo has been very unorthodox and this is what confuses most analysts. They can't think outside of the box.

Now, now - thats very close to trolling ;). The tech difference between the Wii and the WiiU is astounding, which is one of the reasons why all the Nintendo core will have no issue upgrading the WiiU when their game hits.

Sorry, I didn't intend that in the sense that there was no significant difference between the Wii and the Wii U, but just in the sense that this upgrade path is the only one that would provide a noticeable difference. Moving from a 360 or PS3 to a Wii U is barely more than a lateral movement, depending on the game.

You make some good points comparing it to current-gen consoles - but I'm thinking its going to be the same (if not worse!) when the PS4 & next XBOX hit. There was nothing at the Sony PS4 reveal (to me anyway) that screamed *look at me, I'm next-gen*. In fact, I think a lot of consumers will struggle to see a noticable difference between the current-gen and next-gen consoles.

I don't know about that. We got a lot of video and flash in the early demos, but what was there seemed to paint a PS4 capable of much higher performance than the PS3. It's their job over the next several months to show how launch titles will be using that tech to make games that cannot be done on existing hardware, and I imagine a lot of that will come down to multi-platform games that will hopefully look a lot better on the new hardware. If they can live up to some of the tech demo stuff in actual gameplay situations, it will be at least as impressive as the jump from the PS2/Xbox generation to the 3/360 generation. I'm not saying I'm totally sold on the PS4 yet, I tend to be a "middle adopter" anyways, but I'm certainly much more interested in it than the existing Wii U, and I stood outside for several hours on a November morning to get a pre-order slip for a Wii.

As for phones destorying home consoles, I think that's a long way off; perhaps 20-30 years into the future. It's one thing to just combine the elements of a phone and handheld gaming indsutries together, but convincing hardcore gamers to drop their blocks of hardware for a smaller device is an entirely new level.

I don't know. I don't expect games to move away from "sitting in their living rooms, playing on a screen with a real controller" any time soon, but if you can do that by docking your phone into a multimedia rig, and playing "Assassin's Creed VII" on the cell phone's hardware but with a gaming experience indistinguishable from what people do on an Xbox today, I think players could handle that. It might even be a sort of "32X" type device, one where you can dock your phone to provide stronger power input, better cooling, more available ram, etc. to allow it to perform better than it can as a battery powered handheld, but with the "power dock" still being the fraction of the cost of a full console.

At some point the line dividing what is possible on a console, for a console's price, and what is possible on a cellphone, for a cellphone's price, will become close enough together that most people wouldn't bother, and after a certain point, it wouldn't be worth it to the hardware developers to support the few hardcore left. Again, that isn't likely to happen right away, but I bet it's closer to ten years than it is to 30.

@David: While I agree that hardcore PvP and AAA are different, I also think they overlap. What are the biggest console games of the last few years, that have been driving console sales? Skyrim? Halo? CoD? Mass Effect?

As far as the WiiU goes, I'm not talking about "any" AAA hardcore game. We saw a few at launch, but they were all generally ports, and most of them were sub-par. I'm talking about a game like the next Bioshock, next Battlefield, next Skyrim, next Mass Effect or the next Tomb Raider.

If the WiiU would have launched with Bioshock Infinite, GTAV, or Mass Effect 4 - as *exclusives* (even timed exclusives) - and the games would have been done properly, to take full use of the hardware - I'm 98% certain things would have been very different for Nintendo.

Personally, I would have been happy if either(or both) of Skyward or Xenoblade had been delayed and made into a launch WiiU title.

Hell, they couldn't even manage a timed exclusive after the fact. There's no reason that that Rayman game couldn't have come out in winter 2013, and not be available on other consoles until fall, except for Ubisoft taking a look at the Wii U's weak sales and deciding it wasn't even worth it to them to release it yet.

Tim, I believe MS has a policy that stipulates that multiplatform games cannot be released on other consoles prior to the X360 release.

For Ubisoft, that meant they had to delay the Wii U version or else they couldn't secure an X360 SKU. The delay also gave them time to add new game elements, tweak gameplay and generate more hype with marketing efforts that we've seen recently.

Wii U sales likely had little to do with the reason for the lack of a Feb release.

Tim, I believe MS has a policy that stipulates that multiplatform games cannot be released on other consoles prior to the X360 release.

That's a silly rule that they can't possibly enforce. Imagine if Ubi had released Rayman for Wii U on time, and then announced that they were going to release it on the PS3 in the fall, and really wanted to release it on the 360 but Microsoft was blocking them for petty high school BS reasons? There would be a ####storm from Ryaman fans that owned Xboxs, and Microsoft would lose out on probably a couple million in sales. There might even be an anti-competitiveness suit in there somewhere.

Wii U sales likely had little to do with the reason for the lack of a Feb release.

If that were true then they wouldn't have announced it as a fall/winter release for Wii U in the first place. They clearly intended, at least at some point, to release the game on the Wii U first. If that meant that it would be Wii U exclusive then they were apparently, at some point, fine with that. If Wii U sales had met the expectations they went into that plan with, then there's no reason to believe that they would have changed it, but clearly they saw weakness and jumped ship.

I see the 2012 Wii U launch as a bit of a hail Mary, they had this hardware in development, they knew it wouldn't keep pace with the next generation hardware, so they wanted to get out ahead of them with it. If they had hit hard and fast, they could have gotten tens of millions of units out there and captured a decent portion of the third party developers by saying if you make the games, people will buy them". Instead, they've pretty much ensured that it will be a system that will 90% be playing first party games, with significant third party developers never taking it seriously as a primary console, and at most making half-hearted ports that make no serious attempt to maximize what potential the hardware might have. It will be like the Wii, a home for Nintendo games and shovelware, but without the unique gimmicks that the Wii had going for it in the casual market, since the original Wii still does a lot of that stuff just fine, and now the new hardware does a lot of it too.

So much hate for a console that's not even a year old. I think someone here's going to eat crow before the year ends.

The PS4 and the NEXTBOX will have a harder time making their games look next gen since they'll all be compared to their previous efforts. They'll be in so much pressure to sell at least 5 million units each before the fiscal year ends, they're most likely to fail reaching their targets and publishers who supported them will not be amused.

Thanks for the answer. I guess what I'm trying to say is any type of AAA games which represent what Warren Spector called "killing stuff or jumping around in a heavily disguised corridor" will only appeal to a small percentage of the core audience. So from Nintendo's point of view, 3rd party AAA support would have little to no impact on Wii U sales.

Bioshock Infinite is a great example. The game only reached approx. 2 percent of an active worldwide installed base of approx. 86 million. So if Bioshock Infinite had been released as a Wii U exclusive, would this have impacted Wii U sales in any significant way? In all likelihood, no. Because the Wii's established audience and the overwhelming majority of 360 and PS 3 players would not pay $300 to $350 for a new system so they could play the types of games they no longer enjoy or have no interest in playing. Which is why Nintendo's decision to release the Wii U before they'd developed the types of games they surely knew would be needed to drive sales makes absolutely no sense.